UT 10 points On January 1, 20X1, Railcar Leasing Inc. (the lessor) purchased 10 used boxcars from Railroad Equipment Consolidators at a price of $8,749,520. Railcar leased the boxcars to the Reading Railroad Company (the lessee) on the same date. The lease is for eight years and calls for eight annual payments of $1,500,000 to be made at the beginning of each year, with the first payment due on January 1, 20X1. The boxcars have a nine-year remaining useful life, the lease contains no renewal or bargain purchase option, and possession of the boxcars reverts to the lessor at the lease's end. The lessor expects the boxcars to be worth $1,000,000 at the end the lease term, but this value is not guaranteed by the lessee. The payments' collectibility is reasonably certain, with no important uncertainties regarding unreimbursable costs to be incurred by the lessor. The lessor has structured the lease to earn a rate of return of 12.0%. Use tables (PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided.) Required: 2. Prepare Railcar's amortization schedule for the first three years of the lease. 3. Prepare all journal entries for Railcar for 20X1 and 20X2. Assume that it reports on a calendar-year basis. X Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 2 Required 3 Prepare Railcar's amortization schedule for the first three years of the lease. (Round your answers to 2 decimal places. Input all values as positive amounts.) Date Payment Interest Income Receivable Reduction Balance Prior 01/01/20X1 $ 0.00 $ 0.00 $ 0.00 01/01/20X1 $ 1,500,000.00 $ 1,500,000.00 $ 1,500,000.00 01/01/20X2 8,749,520.00 7,249,520.00 6,619,462.00 5,913,797.00 $ 0.00 $ 0.00 X $ 794,335.00 X 705,665.00 X 709,656.00 790,344.00 X 01/01/20X3 Prepare all journal entries for Railcar for 20X1 and 20X2. Assume that it reports on a calendar-year basis. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Round your answers to 2 decimal places.) No Date General Journal Debit Credit 1 01/01/20X1 8,749,520.00 Amortization expense Accumulated depreciation - leased assets 8,749,520.00 2 01/01/20X1 Lease expense 8,749,520.00 Right-of-use asset - finance lease 8,749,520.00 3 01/01/20X1 Net investment in leased assets x 1,500,000.00 Accumulated amortization 1,500,000.00 4 12/31/20X1 869,942.00 Interest payable Interest income - leases 869,942.00 5 01/01/20X2 Interest income - leases x 1,500,000.00 Accumulated depreciation - leased assets 1,500,000.00 6 12/31/20X2 Interest expense 794,335.22 Interest income - leases 794,335.22